Bullish AB=CD pattern seen with heavy convergence on Gold!

Beginning with the weekly timeframe this morning, we can see that Gold is selling-off from supply taken from 1205.6-1181.2. If this bearish momentum continues, it is likely price will shake hands with swap support coming in at 1157.4. However, scrolling down one lower, daily action shows us that price is now lodged within a swap demand base drawn from 1169.8-1154.7.

Turning our attention to the 4hr timeframe, reveals that Gold took a turn for the worst yesterday going into the American open, thus invalidating our previous AB=CDbearish pattern (see here: http://blog.icmarkets.com/wednesday-21st-october-daily-technical-outlook-and-review/) and driving deep into a swap demand area at 1169.8-1162.5.

Taking the above into consideration, our team has absolutely no interest in entering long from current prices. Where we are interested in buying from today, however, is the demand situated just below at 1154.7-1155.9. Here’s why:

1. Strong-looking 4hr demand.
2. AB=CDbullish pattern completes just above it at 1156.4.
3. 38.2% Fibonacci support also seen just above 4hr zone at 1158.0.
4. Located deep within the daily swap (demand) base at 1169.8-1154.7.
5. Positioned just below the weekly swap (support) level at 1157.4.

Given these five points, our team has come to a general consensus that placing a pending order just above the aforementioned 4hr demand area at 1156.5 is certainly worth the risk!